Brazilian Miner Boosts Rare Earths Output in Challenge to China’s Grip

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(Bloomberg) — Brazilian miner Serra Verde Group is boosting production of rare earth minerals at a time of increasing trade friction between the United States and China, the world’s dominant supplier of minerals critical to technology.

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The company, which began producing the concentrate commercially in the Brazilian state of Goias about a year ago, plans to deliver 5,000 tons of rare earth oxide annually in 2026, Chief Operating Officer Ricardo Grossi said in an interview. He said Monday that higher production will come along with With increased production capacity without revealing numbers.

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Serra Verde is also considering strategic partnerships with companies and countries to expand the production and processing of rare earth metals, said Grossi, whose closely held company produces neodymium, praseodymium, terbium and dysprosium. He sees an opportunity for the mining company to become an alternative supplier to the West of such vital minerals, especially if China expands export controls against the United States to include more minerals.

China plays a dominant role as a producer and processor of the 17 rare earth elements used in magnets needed for electric cars, wind turbines and solar panels, as well as in important military equipment. The Asian country, which controls 70% of the materials extracted and 90% of the refining capacity, produced 240,000 tons of rare earth oxide equivalent in 2023, according to the US Geological Survey. Such dominance has prompted the United States and its allies to search the world for alternative sources to reduce dependence on China.

Serra Verde is backed by Denham Capital and has been backed by US Energy and Minerals Group and Vision Blue Resources Ltd. In the UK, including a $150 million investment in October. Negotiations for another round of financing are still ongoing.

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“The investment could be made by a new partner or by our existing investors,” said Grossi, a mining engineer who has worked for companies such as Vale SA and Anglo American Plc.

The company is also evaluating the possibility of expanding its Brazilian operations, which could double production before 2030. Serra Verde’s efforts have been recognized by the Minerals Security Partnership – a collaboration between 14 countries including the United States as well as the European Union, which aims to accelerate the development of Sustainable, safe and diversified supply chains for these important minerals.

While rare earth metal prices have been hurt by abundant supplies, Sierra Verde is counting on continued desire for the elements to produce more magnets. Asia is currently the main destination for its production, Grossi said. The company is seeing an increase in demand for its products by 8.5% annually until 2035. This is expected to be a strong boost to the company’s balance sheet.

“We’re starting to show revenue for the first time in 15 years, which is already a win,” Grossi said. “The company’s financial dynamics are set to completely change from 2026 onwards.”

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